AM Best Upgrades Credit Ratings of National American Insurance Company

OLDWICK, NJ, September 15, 2022–(BUSINESS WIRE)–AM Best has upgraded the Financial Strength Rating to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Rating to “a” (Excellent) from “a-” (Excellent) of National American Insurance Company (NAICO) (Chandler , OK). The outlook of these Credit Ratings (ratings) has been revised to stable from positive.

The ratings reflect NAICO’s balance sheet strength, which AM Best assesses as very strong, as well as its strong operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The upgrade of NAICO’s ratings is based on the revision of its operating performance assessment to strong from adequate, primarily driven by consistent positive underwriting results over the past decade. In addition, this was aided by the company’s pure loss ratio, which exceeds the industry composite average by over 10 percentage points, but is partially offset by an elevated underwriting expense ratio. Furthermore, the company has reported profitable pre-tax operating return measures that are either comparable or have outperformed its industry composite averages on a five- and 10-year average basis, as well as growing net investment income generated over the past five years, reflective of steady growth in the invested asset base driven by positive operating cash flows. NAICO’s positive underwriting performance can be attributed to management’s implementation of loss control mechanisms that allow the company to remain selective in underwriting new accounts, along with management’s conservative market approach as demonstrated by its willingness to release unprofitable accounts.

NAICO’s balance sheet strength assessment of very strong reflects its risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). Additional factors are the company’s conservative and consistent reserving practices. prudent investment portfolio, solid liquidity measures, which are enhanced by positive underwriting and operating cash flows, as well as

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AM Best Affirms Credit Ratings of Arabia Insurance Company sal

LONDON, September 09, 2022–(BUSINESS WIRE)–AM Best has affirmed the Financial Strength Rating of B+ (Good) and the Long-Term Issuer Credit Rating of “bbb-” (Good) of Arabia Insurance Company sal (AIC) (Lebanon). The outlook of these Credit Ratings (ratings) is negative.

The ratings reflect AIC’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).

The negative outlooks reflect ongoing country risk pressures on AIC’s credit profile stemming from its exposure to Lebanon, where its head office is located and approximately 8% of total investments were held and 3% of revenues originated in 2021. The negative outlooks also factor in the company’s use of debt to support its operations, and the significant refinancing risk associated with its exposure to debt with a short maturity.

AIC’s balance sheet strength is underpinned by risk-adjusted capitalization at the strongest level, as measured by Best’s Capital Adequacy Ratio (BCAR). The assessment factors in the solid geographic diversification of AIC’s exposures in terms of operations and assets, which to some extent insulates the group from the very high political, economic and financial system risks in Lebanon. A partially offsetting rating factor is AIC’s limited capital fungibility, constrained by increased regulatory solvency requirements in the jurisdictions in which the group operates.

AIC has a track record of adequate operating performance, demonstrated by a five-year (2017-2021) weighted average return on equity (ROE) of 1.2%. Results have deteriorated in the past two years, negatively impacted by one-off events, including the explosion in the port of Beirut in 2020, and the devaluation of the Lebanese pound in 2021, translating in ROEs of -6.2% and 0.0% for each of these years, respectively. AM Best expects prospective operating performance to improve and

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